"Must Show Reasonable Cause For Not Disclosing Earlier"- Bombay HC On Plaintiff Seeking Amendment Of Plaint To Produce Documents In Commercial Suit

A Bombay High Court Bench of Justice Manish Pitale has observed that in a commercial lawsuit, if the plaintiff wants to modify their complaint to add documents as evidence, they need to provide a valid explanation for not presenting those documents when they originally filed the suit, especially if the documents were under their control and possession.

In that context, it was further said that, "the only provision under which the Applicant can place on record a document which was in its power, possession, control or custody at the time of filing of the suit but was not filed along with the plaint, is Order XI Rule 1(5) of the CPC, as applicable to the commercial courts. The said provision mandatorily requires the Applicant/Plaintiff to establish a reasonable cause for non-disclosure of the document along with the plaint."

Senior Advocate Sharan Jagtiani appeared for the plaintiff, while Senior Advocate Ashish Kamat appeared for the defendants.

In this case, the dispute originated from a commercial suit filed by Khanna Rayon Industries Pvt. Ltd., seeking specific performance of a development agreement related to parking spaces in a property.

The plaintiff wanted to amend the complaint and include two Exhibits containing additional documents.

The defendant opposed this amendment, arguing that strict requirements under the Commercial Courts Act should apply, as the documents were already in the plaintiff's possession at the time of filing the suit.

The plaintiff, on the other hand, contended that Order VI Rule 17 of the CPC allowed for liberal amendments to resolve the dispute effectively. They argued that the Commercial Courts Act did not amend Rule 17, and therefore, the amendment should be permitted.

The key issue was whether the court should allow amendments for introducing documents not initially disclosed with the plaint, and if so, under what conditions.

The Court observed that there was no uarrel with the proposition that the Court has to be liberal when amendment is sought at the pre-trial stage and if the proposed amendment is necessary to determine the real question in controversy between the parties, such an amendment would in normal course be granted. In light of the same, it was said that, "This test has to be applied to the proposed amendment in the present case also."

Observing that a twin test must be satisfied, the Court noted that, "when the Plaintiff intends to place on record documents in the present suit, which is admittedly a commercial suit governed by the provisions of the Commercial Courts Act and consequently by the provisions of the CPC as amended by the said Act, such a proposed amendment has to be tested on the touchstone of Order XI of the CPC as amended and made applicable to proceedings under the Commercial Courts Act." 

Subsequently, it was observed that if if the approach canvassed on behalf of the Applicant is accepted, the Applicant i.e. Plaintiff would be able to avoid the mandatory requirement of Order XI Rule 1(5) of the CPC, as applicable to commercial suits, of establishing reasonable cause for non-disclosure of a document along with the plaint. The Applicant could simply annex documents to an application under Order VI Rule 17 of the CPC and avoid the rigor of Order XI of the CPC, as applicable to commercial suits. In that context, it was further said that, "This cannot be permitted, as it would run counter to the objects and reasons for enactment of the Commercial Courts Act and the specific amendments brought about in the CPC. It also cannot be said that if the contentions raised on behalf of the Applicant herein are rejected, Order VI Rule 17 of the CPC, when applied to applications for amendment filed in commercial suits, would stand impliedly amended. There is no question of Order VI Rule 17 of the CPC being impliedly amended when the Court insists upon applying provisions of the CPC specifically modified by the Commercial Courts Act, in tune with the objects and reasons for which the said Act has been enacted. In such situations the plaintiff must satisfy the twin test of Order VI Rule 17 of the CPC and Order XI Rule 1(5) of the CPC, as amended and made applicable to commercial suits".

In light of the same, the Court held that it could allow an amendment of a commercial suit if such amendment is found to be necessary for deciding the real question in controversy between the parties, but if the proposed amendment is coupled with a prayer for placing on record documents that were in the power, possession, custody or control of the plaintiff, but were not filed with the plaint, the Court would be bound to apply the rigor of Order XI of the CPC, as amended and made applicable to commercial suits.

Subsequently, the Court observed that the plaintiff's application failed to provide sufficient reasonable cause for not disclosing the documents along with the plaint, and deemed the reasons stated as "oversight" and "inadvertence" insufficient. As a result, the court rejected the proposal to place additional documents on record and only allowed the amendment as per the first Exhibit, which was not seriously objected to by the defendants.

Cause Title: Khanna Rayon Industries Pvt. Ltd. v. Swastik Associates & Ors

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